Bitcoin Is Rocketing Higher--Here's Why

Bitcoin has again shot past $4,000 per bitcoin, giving fresh hope to long-suffering investors who have been stuck in a bear market for over a year—the second weekend in a row the bitcoin price has rallied.

The bitcoin price jumped from around $3,900 earlier today to over $4,100, according to the latest prices from Luxembourg-based bitcoin exchange Bitstamp, and pushed bitcoin's market capitalization over $70 billion and the total value of all cryptocurrencies to over $140 billion.

The bitcoin price hit an all-time of almost $20,000 in December 2017 but has been falling since then, dropping as low as $3,000 per bitcoin over the last few months.

"This entire rally seems to have been caused by a shortage in the supply of new ethereum," eToro's senior market analyst Mati Greenspan said in a note to clients yesterday. "This recent rally certainly has the big fish nibbling.

"We've been in the accumulation zone for a while now and this latest push off the floor might just be enough to bring the market out of a slump, but there are several technical levels that need to be broken before that happens."

The ethereum network had, until the beginning of this year, been producing about 20,000 to 30,000new ether per day. However, since the beginning of the year the amounts have been tapering off and last week was producing 13,000 per day.

The bitcoin price leaped higher earlier today, climbing back over the $4,000 mark.

CoinDesk

Next week, ethereum's long-awaited Constantinople upgrade is due to go ahead on February 27.

The upgrade, which will speed up processing times, improve the way the network monetizes data storage, and reduce mining rewards from three to two, is ethereum's eighth hard fork.

The bank, which wants to use the private digital token to lower costs and speed up international transfers, has long been a critic of bitcoin and decentralized blockchains and the announcement has been taken as an endorsement of bitcoin's underlying technology.

Bitcoin bulls remain confidentthat a number of high-profile developments could spur the price higher in the near future. New York Stock Exchange owner, Intercontinental Exchange, along with coffee chain Starbucks, computing giant Microsoft, and Boston Consulting Group, are backing a new company called Bakkt that will facilitate bitcoin futures trading by the first quarter of next year, after delaying the launch from November.

In October, Fidelity Investments, which administers more than $7.2 trillion in client assets, unveiled standalone company called Fidelity Digital Asset Services to handle custody, the safe storage of digital assets, for bitcoin and other cryptocurrencies and will execute trades on multiple exchanges for institutional investors.